£8m salary and United must pay £5m to sack him
Louis van Gaal will lose out on more than £1 million of his annual salary at Manchester United if his side fail to qualify for next season’s Champions League.
The Times has learnt that more than half of Van Gaal’s £8 million annual package is based on a series of performance-related, loyalty and image rights clauses. The Dutchman will get a £400,000 bonus if United win the FA Cup and a £5 million payoff if he is sacked at the end of the season.
The Times can reveal details of Van Gaal’s contract for the first time, a week after he insisted that United pressurised him into signing a three rather than two-year deal, a claim that is contested by others at Old Trafford.
Of Van Gaal’s £8 million-a-year contract he signed in May 2014, only £3.3 million is guaranteed as basic pay. The rest of the package is made up of a £2 million loyalty payment, £1.6 million for image rights and £1.1 million for taking United into the Champions League. All those sums were paid last year after United finished fourth in Van Gaal’s first season at Old Trafford, but the Champions League payment is in jeopardy this season because his side are fifth in the Barclays Premier League, four points behind fourth-placed Manchester City but with a game in hand.
In addition to his salary Van Gaal can earn a series of payments based on the team’s performance, although only the FA Cup-winning bonus remains in play this season, with United meeting Crystal Palace at Wembley on May 21. There is no bonus for reaching the final.
A further indication of the dim view United will take of failing to qualify for the Champions League is found in the fact that winning the Europa League would earn Van Gaal £400,00, the same as winning the FA Cup, although there is a £200,000 bonus payment should he reach the final of the secondary European competition.
Van Gaal has already missed out on potential bonuses this season of £1.5 million for winning the Champions League, £1.5 million for winning the Premier League — finishing second in either competition would have earned him £750,000 — and £200,000 for winning the Capital One Cup.
The 64-year-old’s contract also stipulates a further £400,000 bonus for winning the Fifa Club World Cup and £200,000 for winning the Uefa Super Cup, although it is unlikely he will ever take United in to either competition.
The Times has also learnt the details of Van Gaal’s payoff should he be sacked at the end of the season, which remains the expectation despite his defiance last week when he insisted that he would see out the final year of his contract. The severance terms of that contract entitle him to 66 per cent of his existing salary unless he gets another job in football before June 2017, in which case the payments would cease. If he is sacked United will continue to pay Van Gaal two thirds of his salary — including the loyalty and image rights elements — on a monthly basis so it will cost them approximately £5 million to dismiss him.
The financial cost of sacking Van Gaal is not thought to be a factor as the club consider his future. While his success in bringing talented youngsters such as Marcus Rashford and Timothy Fosu-Mensah into the first team in recent months counts in his favour there remain concerns over Van Gaal’s style of football and a dictatorial approach that has alienated senior players, in addition to the probability of missing out on the Champions League for the second time in three years.
José Mourinho has made it clear he wants the United job, but the club will not be forced into making such an appointment. The Portuguese would demand wages of between £10 million and £12 million a year and it is unclear whether he would accept the salary structure agreed by Van Gaal.
Ronaldo, the former Brazil striker, had praise for Rashford. “He’s a very good player,” he told The Sun. “I see myself in him. He has an amazing future.”